Rules and Guidelines

Purpose

The Venture Labs Investment Competition (VLIC) and its affiliated competitions are designed to mimic the real-world process of raising venture capital. The competition allows graduate students to gain real experience while developing and growing new ventures based on their own ideas and technologies or those developed by others.

The spirit of the competition is to allow ventures conceived and developed during the graduate school experience to participate. This means excluding ventures that were started prior to graduate school admission or are an expansion of an established business.

This document sets out guidelines to capture these goals. Not every circumstance can be anticipated. We reserve the right to disqualify any team and university that violates the rules, regulations or the spirit of the competition.

Competition directors and faculty advisors are responsible for ensuring and attesting that their teams meet these requirements. The teams are also responsible for ensuring their own eligibility. All bids to participate in a competition are accepted by the sponsoring university. Violations by any team will result in the school's disqualification in this year's and the following year's competition(s), as well as forfeiture of awards and prize monies by the participating team.

If at any point you have questions about your eligibility to compete or the rules as they are laid out below, contact us at infoVLIC@mccombs.utexas.edu .

Rules and Guidelines

Nature of Ventures

Ventures must intend to be operating companies with corporate structures and financial statements that reflect real operating revenues and expenses. This is intended to exclude investment vehicles, partnerships, licensing and other pass-through entities where returns are measured for investment value versus operating earnings.

The competition focuses on new, independent ventures in the seed, start-up or early growth stages. In addition to what is outlined in the above paragraph, generally excluded are the following: buy-outs, expansions of existing companies, roll-ups, real estate syndications, tax shelters, franchise based outlets, licensing agreements for distribution in a different geographical area and spin-outs from existing corporations. Licensing technologies from universities or research labs is encouraged assuming there has been no previous commercialization. Key in these types of ventures is demonstrating significant added value to the technology through the efforts of the management team.

All ventures must be seeking outside equity capital thus it is expected that their business plan and presentation will be investor ready.

Prior Activity

Ventures, and their base concepts, may compete for only one season (academic year) in the Global Venture Labs Investment Competition, or in any of the affiliated competitions. Ventures may not compete in any Global VLIC-affiliated competitions once they have competed in the Global Venture Labs Investment Competition. Ventures that have generated revenue or raised working/equity capital from sources other than the members of the student team or their immediate friends and family before the current academic year are excluded. GVLIC reserves the right to request copies of any funding agreements.

University Sponsorship and Faculty Adviser Involvement

The business venture must be developed under direct faculty supervision. Ideally, the venture will be prepared for credit in a regularly scheduled course or as an independent study. The executive summary and business plan must represent the original work of members of the team. All universities with participating teams are strongly encouraged to send faculty or other university advisers to the competition.

Bids to GVLIC-affiliated competitions must be accepted by a team's faculty adviser. The faculty adviser must, on behalf of the sponsoring university, attest to the eligibility of the team, their adherence to the rules and guidelines and acknowledge potential penalties for violations and infractions.

Team Composition

These are competitions designed for graduate students; however, teams with a minority of undergraduates can still compete but must conform to the graduate student majority rule during actual competitions. Students from any graduate program—not just MBAs—are eligible to participate, including executive and evening format programs. Non-students may be members of the venture's management team and may participate in planning the venture, however only students may participate in the competition and its related competition events.

Each team is limited to five presenting members and one faculty advisor. Each of these members must take an active role, i.e. they must deliver part of the presentation and participate fully in the question and answer section. Additional student assistants or helpers plus other team representatives may attend the competition as observers but cannot directly participate in any competition related events e.g. Trade Shows, Elevator Pitches and will not be allowed to attend any closed sessions.

Any team participating in an undergraduate competition, regardless of team re-configuration, is automatically disqualified from subsequent affiliated competitions and the Global Venture Labs Investment Competition.

Student Involvement

The competition is for student-created, managed and owned ventures. This is the most common area for requested rules clarification. The guidelines are:

Students played a major role in conceiving the venture, have key management roles and own significant equity in the venture.

Significant equity is defined as having 50 percent or more of the equity allocated to the management team and key advisers.

The objective of this rule is to exclude ventures formed and managed by non-students who have token student representation to compete on the investment circuit.

Student Enrollment and Eligibility

This competition is for students currently enrolled in graduate school, not just MBAs. Students in Certificate Programs or Post-docs are specifically excluded from GVLIC competitions. We encourage executive education or evening school students to participate in the competitions. Students in an executive or evening school program who graduate between September and May of the current academic year are eligible to compete in that academic year's competitions. Students in these programs that graduate from June to August may opt to compete in competitions in the following academic year. Such students are not allowed however to compete at competitions in multiple academic years using the same plan.

Exceptions will be made for students who both formed their business venture for academic credit and graduated during the preceding summer and for students from universities not having a traditional graduation time frame.

Preparing an Executive Summary

Summaries should be submitted as a single, printable PDF file. Documents are limited to no more than two pages with the following parameters: format is 1.5 line spacing with 1 inch top, bottom, left and right margins and 12-point font. This line spacing and font requirement applies to the textual content of the document and not to titles and descriptions accompanying pictures, graphs, tables or worksheets.

Executive summaries should include an explanation of the offering to investors indicating how much money is required, how it will be used and the proposed structure of the deal.

Business Plan Guidelines

The business plan is required for each team at submission and will be reviewed by the judges. However, based upon that review the full plan may or may not be further evaluated by the judges. In the case of a particularly engaging executive summary, the judges are encouraged to include the business plan in their decision.

Plans should be submitted as a single, printable PDF file. The business plan is limited to no more than 20 pages. This would include a single cover page, single table of contents page, two page executive summary, 10 pages of a business plan (note cover page and Table of Contents are required) and can include up to six additional pages of appendices. Page format is 1.5 line spacing with 1 inch top, bottom, left and right margins, and 12-point font. This line spacing and font requirement applies to the textual content of the document and not to titles and descriptions accompanying pictures, graphs, tables or worksheets. All pages must be numbered excluding the cover page. The cover page must include venture name and university affiliation. Judges are instructed NOT to read plans that do not adhere to this structure.

To review, here are the required elements and their page limits:

Cover Page— one page

Table of Contents— one page

Executive Summary— two pages

Body of Plan—10 pages

Appendices and Exhibits— six pages

Some additional guidelines regarding content include:

Financial data should include pertinent cash flow, income statement and balance sheet details.

If equity is part of the offering, delineate the exit strategies.

Appendices should be included only when they support the findings, statements and observations in the plan.

Presentation Rules

The presentation format is 30 minutes running clock, but judges may interrupt at any time with questions. Each member of the team present at the competition must participate fully during the formal presentation of the plan.

Teams may not observe other teams present in their division until after they have presented their own plan.

Each team needs to supply its own PC-compatible laptop computer and is responsible for assuring it works with the provided audio-visual equipment in advance of their presentation.

Teams may videotape or record their own presentations but cannot do the same for other competition teams without the express written release of all team members and the attending faculty adviser.

IP Considerations

All sessions of the competition are open to the public and may be broadcast to interested persons through media which may include radio, television and the Internet.

Any data or information discussed or divulged throughout the competition should be considered information that will enter the public domain.

The University of Texas at Austin McCombs School of Business and the organizer of the Venture Labs Investment Competition may make photocopies, photographs, video recordings and/or audio recordings of the presentations including the business plan and other documents, charts, media or other material prepared for use in presentation at VLIC.

The above entities may use the materials in any book or other printed materials and any videotape or other medium that they may produce, provided that any profits earned from the sale of such items is used by these entities solely to defray the costs of future Venture Labs Investment or affiliated Competitions. These entities have non-exclusive world rights in all languages and in all media to use or to publish the materials in any book, other printed materials, videotapes or other medium and to use the materials in future editions thereof and derivative products.

Dropping Out of a Competition

If at any time a team withdraws or does not compete in a competition after accepting a participation bid, the team and university will be subject to disqualification from competing in the Global Venture Labs Investment Competition and any other GVLIC affiliated competitions for that year and the following year - a two-year ban. All violations will be reported to the Competition Directors Committee by the subject Competition Director with documentation of the violation.

Rule and Guideline Violation Reporting Process

Adherence to the rules and guidelines set forth in this document is critical to the success and credibility of all GVLIC competitions. To that end, GVLIC has set up a due diligence process:

All teams along with individual members and faculty advisers must attest to conforming to all rules and guidelines.

Competition directors as hosts of GVLIC affiliated competitions are charged as the first line of screening participating teams and completing a thorough review of any potential issues. Suspected violations and infractions will be reported directly to the Rules and Guidelines Committee and the GVLIC director through the submission of the Post Competition Report.

Individual faculty advisers may bring to the attention of competition directors questions regarding potential rules and guideline violations. It is the responsibility of the competition director to complete a timely review of the issue and report any suspected violations.

All reported issues will be reviewed and if deemed necessary penalties will be imposed upon the identified team and its sponsoring university.

Awards

Teams are encouraged to review award criteria, categories and amounts for GVLIC and each of its affiliated competitions. In most cases, distinction is made between cash and non-cash awards along with accompanying restrictions or agreements. It is the responsibility of the participating team to fully review each competition’s award structure including possible payout or investment requirements.

Teams must be present at the competition’s scheduled closing award event. Failure to attend will result in forfeiture of all awards and prizes secured during the competition.

This document sets out guidelines to maintain a graduate student-based funding competition. Not every circumstance can be anticipated. The directors reserve the right to disqualify any team that violates the rules, regulations or the spirit of the competition. Any questions regarding eligibility should be sent to infoVLIC@mccombs.utexas.edu . A subcommittee of other competition directors will make the call on situations that are not directly covered in these rules.